Firm Suburbanization in the Context of Urban Sprawl: Neighborhood Effect and Sectoral Difference

Abstract

This study explores spatial patterns and mechanisms of industrial growth in Salt Lake County, Utah, which vary with sectoral divisions and scales in the context of urban sprawl. We find that besides the center growth, producer services prefer newly developed areas, and manufacturing has a suburbanizing growth pattern. The spatial regressions indicate neighborhood effects among mechanisms: At the block group level, producer services are more sensitive to community characteristics than manufacturing. At the neighborhood level, whereas producer services are still profoundly affected by community characteristics such as population density and higher education rates, manufacturing only responds to agglomeration effects. The model sets further uncover the variety of mechanisms among industry sectors. These results illustrate different location preferences of industry sectors and challenge the traditional view regarding producer services as an entire group. Highlighting the preference of firms to newly developed areas, our research discloses the growth pattern in Salt Lake County and illuminates the effects of sprawl development, such as low population density and car-based development, in the firm suburbanization process. It also reveals that growth patterns and mechanisms might vary with industry sectors and due to neighborhood effects. Thus, these effects should be carefully considered in research and policies.